IRVINE (April 2, 2010) - A package of bills has been introduced in the California State Assembly and Senate aimed at creating jobs and easing the onerous financial burden of regulatory compliance on businesses. Several of these would alleviate burdens on farming companies and increase the ability of farmers to hire more workers and better compete with farm producers in other states and countries where regulations are fewer and less costly. Among the bills WG supports: SB 960 (Dutton –R) “Air Resources Board Regulations Report” and AB 1833 (Logue –R) “Economic Impact Analysis.” Committee hearings on SB 960 will commence Monday, April 5th in the Senate Environmental Quality Committee, while AB 1833 will be heard in the Assembly Business and Professions Committee on Tuesday, April 6th.
“California’s regulatory burdens increasingly absorb more and more of our farmers’ resources – both time and money,” says Tom Nassif, president and CEO of Western Growers (WG). “If farming is to remain viable in California in the long term, the cumulative effects of all state regulations need to be examined and considered.”
SB 960 (Dutton –R) “Air Resources Board Regulations Report” would require the Office of Administrative Law to conduct economic analyses of major California Air Resources Board regulations. AB 1833 (Logue –R) “Economic Impact Analysis,” expands the scope of the economic analysis to include financial impact to businesses. Currently, state agencies only have to outline the cost to implement the regulation.
According to a study by the Institute for the Study of Specialty Crops at Cal Poly San Luis Obispo, there was a 69% increase in the amount of farms’ operating costs allocated to regulatory compliance from 1999 to 2004 – a trend that has continued in the last six years. In fact, California fresh fruit, vegetable and tree nut farmers pay more in regulatory costs than the state of Tennessee produces in total agricultural production.
Fresh produce farmers cannot pass cost increases demanded by government regulatory compliance onto buyers. The market price of each commodity (strawberries, lettuce, broccoli, etc.) fluctuates daily based upon supply and demand. Each additional regulation handed down to farmers creates more fees and labor hours – contributing to higher production costs. Farmers must continually absorb those costs. Three of these fees/costs (air quality fees, chemical use fees, and workers compensation costs) increased over 100% from 1999 to 2004. Produce grown in foreign nations where regulations are few, has become much cheaper than locally grown produce. Not surprisingly, the quantity of imported produce has steadily increased. Legislators and government regulatory agencies need to make an effort to minimize the impact of the regulatory environment on producers while still maintaining their goals. SB 960 and AB 1833 would contribute to that effort.
Western Growers is agricultural trade associations whose members from Arizona and California grow, pack and ship ninety percent of the fresh fruits, nuts and vegetables grown in California and seventy five percent of those commodities in Arizona. This totals about half of the nation’s fresh produce.